Do you want the freedom to travel and spend time with your family while your business continues to double or triple it’s growth each year and runs without you successfully?
OWEN: My guest today is Jock Purtle and he’s the founder of Digital Exits. Jock, welcome to the show.
JOCK: Thanks Owen.
OWEN: This interview is all about getting guests in here to talk about how they systematize their business and the steps they took to actually make it happen so the business runs successfully without them. Before we get started I want to know what will you say is a mind blowing result that you now experience as a result of going through process of systematizing and automating your business.
JOCK: I can travel anywhere in the world, whenever I want, at any time I want, and our business has doubled its gross sales every year since.
OWEN: That’s awesome. How has your business been transformed as a result of you systematizing your business?
2; First of all, I’ve got more time. I used to do a lot of admin work, detail work, and do a lot of stuff that I really am not very good at, and that’s freed up. A lot of the time to work on more important tasks like business development strategy, all that good stuff.
OWEN: How’s your personal life been transformed as well as a result of systematizing your business?
JOCK: I’m a lot healthier than I used to be. I got more time to go to the gym. I started playing rugby again, just generally a lot of the stress, eating a lot better, all those good stuff. So personally great as well.
OWEN: That’s good. Since you have systems in place that allows it to run without you what will you say is the longest time you’ve been away from your business?
JOCK: That’s a good question. Probably at least a month. I can’t say that I’m not checking in, having a weekly call with team members while I’m on the road etc. I don’t think there’s true passiveness to business because without a key driver driving the business it’s eventually going to fail. Technically I could pack up shop at the moment. Actually, I spent 2 months in Europe last year running the business type of thing. The other thing about systemizing it is I’m also location independent as well. That was something that I used to have staff that work from home but staff would come around and work from home and systemizing stuff. I don’t have to be there with them all day, every day.
OWEN: Awesome. Let’s give the listener some context as to what your business actually does. What exactly does your company do and what big pain do you solve for your customers?
JOCK: Sure. Digital Exits helps established online entrepreneurs find a buyer when they want to sell their business. So that’s the big thing that we do. I also own, I call it an affiliate business. Let’s just call it a media company that monetize through advertising sides as well. I’ve got 2 businesses.
OWEN: Awesome. How many full time employees do you have?
JOCK: Three full-time with Digital Exits and the media company has seven. Also, we’re in the process of raising a fund to go an acquire businesses. And then my business partner for that company has 65 staff.
OWEN: Just so the listener knows in terms of revenue, is the company profitable, and what was last year’s annual revenue and so on?
JOCK: Yes, it’s profitable. Digital Exits did low to mid 6-figures last year. The media company did the same. I won’t disclose the fund yet as we haven’t raised any cash for it other than having personal funds invested.
OWEN: No problem, Take us back to when the business was not systematized and automated like it is now. What was wrong with it last time?
JOCK: Me, I was the problem. Me being the bottleneck, me trying to do too much stuff whereas I should’ve been. That meant that the most valuable tasks weren’t being addressed. For example for the Broke ridge it’s getting new businesses to sell, that’s their highest value task. I was doing a lot of the admin. We were using not tools, no SOP’s. If one person got sick or left there wasn’t’ someone to back them up. Essentially anything that could go wrong would go wrong.
OWEN: So you’re spending more time doing the admin stuff and not as much time doing those high value task. And back then when the business was not systematized what will you say was the lowest point and describe how bad it got?
JOCK: I was punching out 70-80 hour weeks, I’m horrible with doing administrative work. I’m not very detail orientated. Stuff would fall through the gaps, we’d lose deals, leads would not get followed up, customers would be unhappy, it was generally a mess really.
OWEN: When will you say was your breaking point? When did you realize that you needed to systematize and change things around. What happened?
JOCK: I guess a couple of things. I took on a partner in a project and they essentially were operationally sound. Told me what the hell are you doing, you need to fix this. That was probably the biggest tipping point. To be honest there was no like this is broken…
OWEN: Can you remember a specific instance what they saw that made them say that?
JOCK: Well, there was just nothing in place in terms of tools. There was nothing in place in terms of standard operating procedures. There was nothing in place in terms of reporting, weekly, monthly reporting, KPI’s, targets, it was very ad hoc. Do a little bit here do a little bit there, there was no structure behind it. That was the biggest thing that they are able to identify that was the tipping point per se.
OWEN: I’m also curious, what was his background that made him come into this knowing when he saw your situation that it needed work?
JOCK: He’d successfully exited 3 businesses. He’s 20 years my senior. I just think it’s experience and knowledge was probably the main thing, and having done it before, having worked in corporate, having built businesses successfully, all that good stuff.
OWEN: Yeah, so basically he sold other companies and used the experience he had prior to when he came and partner with you, and realized you needed to make several changes moving forward. What would you say was the first step that you took to solve the problems regarding the business of being systematized?
JOCK: Probably start hiring someone, that forces you to create the system. When you’re doing stuff on your own it’s pretty easy to know what to do because you just know the systems and processes, it’s all in your head. When you actually have someone sitting there twiddling their thumbs, not knowing what to do, it forces you to document the process, explain to them what gets done, explain to them how it gets done, it’s kind of like a forced catalyst if that makes sense.
OWEN: In your case I guess you decided you needed to hire somebody. What was the role person had to fill for you?
JOCK: That was essentially like an administrative assistant/managed, put together like prospectuses and stuff, and I think we’ll go through later how process works. Basically I wanted like I wanted like he had me in the back and forth, basic stuff talking to customers all of the above.
OWEN: So basically you hired an admin person, and because you were paying that person that forced you to say, “I have to start creating systems otherwise I’m just wasting my money paying. What was the second step you took to solve the problem. What was that?
JOCK: That was mainly documenting the processes, putting any some type of formal structure, systems that we Asana for checklists and for HD project. That would probably be the main thing.
OWEN: You mentioned during the pre-interview that you also took other steps besides hiring the first person and then documenting procedures and processes. You also said making use of a lot of software. What was the software you guys were using?
JOCK: We use Asana, project-based stuff, we use Confluence for managing our SOP’s. We use Trello, that’s sort of like my personal to-do list for my assistant. We use Google apps as like mail service management, and then communication, group calls, that kind of stuff.
OWEN: You mentioned something about face-to-face with your team members because you guys were working virtually. So what is that?
JOCK: I have one team member based here in Austin and so they’ll alternate between working at home and working here at that office. But other than that everyone else is a virtually-based team member. The requirements for online tools, online tracking, online software is even higher with the virtual team.
JOCK: Basically because you’re not face-to-face you don’t have the walk to the next desk and tap them on the shoulder and ask them something. You haven’t got the ability to brainstorm on a white board in the office. You need some type of communal place where you can drop by this, drop conversations, share documents, all of the above, just because they’re not there beside you in the office.
OWEN: How did you prioritize the order of steps to take when it came to systematizing your business. Was there any thought process behind the priority of steps to take?
JOCK: We basically did on a reactive basis rather than a proactive basis. That was the initial steps. I’d love to say that we weren’t super smart behind it but we weren’t.
OWEN: it’s okay. Whatever it was we want to just learn what you did.
JOCK: Yeah. Essentially we did the most urgent stuff first, and we also did as an on-time basis meaning like if were doing a particular task that day, we’re like, ‘We’re going document this process while we’re doing it kind of thing.” It was just like a day-to-day basis. What’s urgent, what’s important, what are we doing at the moment, have we documented it before, let’s document it as we go along type of thing.
OWEN: I think you also mentioned during the pre-interview is that once you had some of those… You first of all started what was more urgent systems for those. But once you had some of the systems in place you now became more proactive and you were looking for bottlenecks. Discuss that what exactly was happening at that point.
JOCK: The great thing about a system is it can always be improved and fine-tuned. One of the questions that we ask in our weekly team meeting is what do we do last week, what’s working, what’s not working, and how we can improve. With those three questions we can be more proactive in bottlenecks. So if someone says, “We’re having a problem with this.” We’ll brainstorm, how do we solve, what are we going to test this week? We test it during that week and then we come back with the results at the end of the following week in terms of how did the test go, is that something we want to make and implement every time. If yes, sticking the SOP, if not we make iterations again until the system and process is better. What happens is you start out with an SOP that might be like 40% efficient. As the weeks roll on you get up to 70%, 80%, 90%. And once you hit that 95% efficiency there’s a point where you can’t get any better at what you do, and so you then attack a different thing.
OWEN: You’ve already mentioned some of the ways you documented procedures and processes for your business and tools you use, but I’m wondering if there were others besides Confluence which you said you used to store the documents for the SOP’s and Asana. You mentioned something about you guys have a copy of workflow for each client in Asana. Can you talk about that specifically?
JOCK: Sure. There’s a step-by-step process in terms of when a new client comes in to when we’ve finished with a client and we’ve documented that whole process. We have a copyable template that’s sitting in Asana so that every time a new client comes in we essentially copy the template, create a copy, rename it. It might be sweetprocess.com as our new client. And then it’s automatically allocated to the person that needs to be allocated through and people just basically go through the workflow system and then check off the all the steps that needs to be done. So that’s how it works.
OWEN: And at the time when you were working on systematizing and automating the business, where there any books or tools, or even mentors that had the most influence on you at that time?
JOCK: I would say my father. I started working in the family business when I was 9. I learned a lot of the skills that I know today in the brokerage business.
OWEN: You had an evaluation company as well?
JOCK: Yeah, we had an evaluation company in Australia. I’ve been doing business evaluation since I was a teenager. And so that helps a lot in terms of my specific skill set. And then in terms of books and mentors, I’m probably a really big reader. I might get through 30 and 50 books a year. But I’ll narrow it down to, let’s say cornerstone, influences on my business side by Think and Grow Rich is excellent. And the whole concept of mastermind is a big thing for me in our business. The 4-Hour Workweek was the reframe in terms of online business. I might also add another one in there that we didn’t talk about is Rich Dad, Poor Dad is I think one of the best books for a mindset reframe on being a business owner and investor versus being an employee and self-employed. I think the biggest jump that I’ve made in terms of systems and processes from my business is going from that self-employed box to the business side box. And then the business side of box technically to the investor box with the fund.
OWEN: Awesome. What will you say at that point where you’re going through that steps of actually systematizing your business. What was the biggest challenge you experience when you initially tried to create these systems and how did you solve them?
JOCK: Big thing is the right people. Firstly, I’m not the right person to build and implement systems and it took me a little while to figure that out. And so actually…
OWEN: That is something, for you the owner to say you were not the right person to build and design the system. That’s honesty at its highest, because most people won’t even say that.
JOCK: Yeah. I know what needs to be done but I’m just not person that’s going to go and do it. I understand that about myself. Actually, once we really got serious.
OWEN: Real quick, how did you even come to the understanding that you’re probably not the right person to document the systems, is that what you mean?
JOCK: I’m really big into personality tests and understanding who you are, your skills are, and what you deficiencies are. I know my personality type really, really well. I know what I’m really good at, I know what I need to focus on, and I know what I’m not very good at, right? And so in regards to that I know that I’m not detail orientated. I know that my ability to develop and design systems isn’t the best skill set that I have. I specifically hired someone with that in mind, and I hired them based on their personality type, and that was the best thing that I’ve ever done. Because they’re awesome and I’m not.
OWEN: Besides the challenge of getting the right people to design the systems you also mentioned another challenge at that point was you original systems were created by the wrong people, talk about that.
JOCK: Sure. They wrong people was me and then the other wrong people is… For example we have marketing systems that we used to use for SEO and they were created by some Filipino, outsourced contractors. What my assumptions were on the processes and how much it cost was wrong. The probably the main thing was the systems was, at the end of the day it’s all me in terms of… I kind of know what needs to be done but I need someone else to do it for me is my point.
OWEN: You also mentioned you had some wrong hires and wrong roles.
JOCK: Again, we’ll go back to the whole concept of I really hire people of their attitude and personality, not for their past experience. What we had was creative people in detail orientated roles in the beginning. That was the wrong seat.
OWEN: Yeah, the wrong person in the wrong seat in the bus I guess.
JOCK: Basically, people need to be working in their genius. And their genius is the specific skill set that they have that they’re absolutely awesome at, but also at the same time they absolutely love doing that all the time every day. You need to find that specific role in your company where that person is in their genius. That comes back to the concept of the right person in the right seat. What we had was the right people in the wrong seat. That’s what I was talking about, the wrong hires. It was not so much that they were the wrong hires as a person, it was the wrong…
OWEN: They’re not role for what they were trying to do.
OWEN: Someone creative trying to do something in terms of creating a detailed procedure. The way they think is not working like that. I get that. You also mentioned that because you guys were always iterating and changing around what you guys were doing, it was also a challenge when it comes to creating systems. Talk about that.
JOCK: I guess we’re always iterating. We have those three questions, what was working this week, what wasn’t, and how do we improve. Basically, how we overcame these biggest challenges was by thinking about the problem, thinking about the solution, and they’re testing. Once we tested, we then evaluated on whether it worked or not. If it did, it made it to the SOP, if it didn’t we then made another assumption, tested that, and the process continues. So always be testing is probably the way that we solve that.
OWEN: I like that. Before you make it final that this how you for now approach this very current task then you guys first of all test it to make sure the procedure will always achieve the same results. Once that’s confirmed then you now update the procedure, until the next time you have to upgrade it again, I like that. Given all these challenges that you mentioned earlier, why did you stay committed to the goal of systematizing your business?
JOCK: I like to my money. I like my time. I like growing businesses and it’s like a lot of businesses… I’m a big fan of Marcus, Lemus, whatever the guy that’s from the TV series The Prophet. He talks about people, process, and product. Those are three main pillars of business. Generally, the product is pretty similar in most businesses, and it’s the people and processes that make the difference. Coming from that frame of thinking is the reason basically why I stay committed to the goal is that I know that we can create a unique selling proposition. We can create a unique company that beats our competition by focusing on our people and processes.
OWEN: I like that. Because the reality to get a good product that people see that is working, people are going to copy it. But to make sure the experience is unique, this is where the whole key point and processes come in place. That’s why you’re getting people that are the right fit and culture. And then designing that unique process that delivers that level of support and customer service that you want your customers to have. I like that. At what point will you say in the story now that you were able to get to the point where you systematized the entire business and have it be able to run without you successfully.
JOCK: To be honest I think the only thing that’s earlier this year with actually got it down pat to the point where we’re iterating without a lot of my input.
OWEN: That’s good. Because we’ve already talked about what your business does. What we’re going to do is go behind the scenes to get them kind of like imagine or understand the different parts of the business and what’s happening in each part. Imagine your business like a conveyor belt. At one point there’s probably somebody who has an online business and they’re thinking of selling it. On the other end of that conveyor belt that same person has actually sold their online business through you guys and they’re out there raving to other online websites referring them over to you guys. But in order for that person to go through that transformation there’s a bunch of different things behind the scenes that were happening to make that happen. What goes behind the scenes of the different parts of your business.
JOCK: Sure. It starts with a lead. You’ve got to get a new customer. We have a girl that’s in charge of doing like SEO outreach. She contacts other sites for interview opportunities, podcasts like this, creating guest content for them, and then the next step in this system is our website. I guess that’s where they automate a bit of software where someone finds our site, the copyrighting, the videos, and all that good stuff does all the selling and then they fill out a lead form or we do an evaluation. After that the next step is someone gives them the evaluation on the phone and they decide whether they want to do business with us. We then sound out some contracts for them to sign to engage us in our services. After that we have a templated set questions and information that we need to get from them as a business owner. Obviously, all of these processes is stuck in Asana and we got all the templated documents that we sent out, all of the above. Once we have all the information we start to develop the prospectus, which is the document that we used to market their business. We then go out and sell that business to our buyers with another process in terms of sending it to our database, uploading it on other classified sites, all that good stuff. And then our buyer broker then handles the back and forth between buyers in terms of information, questions they have, all that back and forth. And then they make an offer. If the offer’s accepted we do the contracts. The contracts we move to escrow. Once all that’s done, once the money’s released the seller does the training. That’s essentially the whole process from top to bottom.
OWEN: You also mentioned something about once the money has gone into escrow and the sale is done you also have a lot of pre-done documents. I guess that’s the contract and all that to…
JOCK: Yeah, that’s the contracts, the letter of intent… A lot of it’s very systemized in that regard. It’s just a sort of plug and play, this business address, this same amount, and all that good stuff.
OWEN: I like what you’ve done just now. You’re basically keeping the listener behind the scenes of the different parts of the business. Just so the listener understands, over the years you guys have been able to systemize this part and even automate certain parts of it. So that depending on the stage where the customer is you guys are following that system regardless of all the customers it’s always the same way but you’re applying the system to that customer. You mentioned the system to let your employees know exactly what to do. You mentioned it earlier in terms of using Asana to manage the workflow and also using Confluence to manage the SOP’s. I’m wondering, how do you track and verify the results delivered by your employees?
JOCK: I guess the ultimate result is does the business sell.
JOCK: That’s our main KPI, do we get a deal. In terms of does stuff get checked off. Basically in Asana you’ve got each step and that’s our way of monitoring whether stuff’s done or not. Whether someone’s actually gone through and completed the task, checked it off.
OWEN: Since you have more free time now based on how you’ve been able to systematize the business. Which areas of the business do you focus on now and why?
JOCK: Three things, acquisitions. You make more money buying and selling businesses that you do brokering them so that’s why in the process of…
OWEN: In terms of buying for yourself and going through that person of systematizing and selling the business as oppose to being a broker?
JOCK: Yeah. The point actually won’t be to sell, just be able to buy businesses and just run them.
OWEN: Okay, I get that.
JOCK: It won’t be buy and flip, we buy and hold and just take the dividends, yes.
JOCK: It would be like Warren Buffet’s style. That’s what my major focus at the moment. Also, on the other side of things, doing a lot more personal branding around me as the expert, buying and selling online business for deal flow and connection, and all that good stuff.
OWEN: I like that too because if you’re the guy who’s known as the guy who’s selling businesses online. Obviously, people will bring businesses to you for you to sell and you do a bunch of that but you cherry picked the nicest ones for yourself and keeping your portfolio. So it works with your new strategy of acquisitions.
JOCK: As long as I’m upfront with the seller, yes. But to` be honest, we actually find very little deals through the brokerage. We’re very specific in terms of what we want. And we generally buy a lot of bigger businesses as well. We hardly find anything through the brokerage to be honest.
OWEN: I’m glad I mentioned that because from the outside one would think that would be the funnel that will work for you to get more acquisition, but I’m glad you’re clarifying that that is totally different. What is the other thing you said during the pre-interview that you’re now focusing on getting back projects, what is that?
JOCK: Only the process of putting together an entrepreneurship camp in August for young entrepreneurs, things like that. I’ve got a specific skill set that I’m good at. I’m quite successful at a young age, and I think this skill set of entrepreneurship is very valuable. It’s going to solve a lot of the longest problems in the future. So I’d like to help. Basically cultivate that as much as I can.
OWEN: That’s awesome. What’s the very next stage of growth for your business. What are you planning to achieve next and why?
JOCK: The next stage in growth could be broken in into two sections. Firstly, there’s the acquisition side of things is the operating company that runs the companies. But for the brokerage it’s really the scaling lead gen through offline channels. So that would be someone doing business development on the phone, doing networking, making cold calls, all that good stuff, because there’s a challenge that we have is educating the market, out services are out there that we exist. The challenge for us is a lot traditional, old school business brokers have no idea about the internet. They’re selling those businesses and they’re doing a horrible job.
OWEN: Okay. Can you quickly summarize the entire step that the listener who’s listening all the way to this point would have go through in order to transform them business so it successfully runs without them.
JOCK: Sure. I think they can probably start with awareness, the fact that you actually have a problem, like the whole Alcoholics Anonymous thing, I think that’s probably number 1. Step 2 is identifying what needs to be done. For me it was finding the right person what needs to be done. For you, it could be the fact that you might be able to do it yourself or an existing team member might be able to do it for you. It would really depend on your personal situation. To be honest if you haven’t done it already you’re probably not the right person anyway. You can basically predict the future from the past. If it wasn’t on your mind/you hadn’t thought about it, slash, how done it, you’re probably not going to do it yourself.’
OWEN: Basically, the founder might just be the bottleneck.
JOCK: Pretty much. I think that’s the case a lot of the time. What’s your opinion on that. You think that’s true based on all the interviews that you done?
OWEN: It is true for a majority of them. So I agree definitely. What will you say is the very next step that someone who’s listening to this entire interview all the way to this point should take in order to get started with transforming their business so it runs successfully without them?
JOCK: There’s a couple of good books, one’s Sam Carpenter’s Work the System.
OWEN: I love that book.
JOCK: The one that I like better is a book called Traction by Gino Wickman. I just like his thinking better than Sam’s. It’s less story-telling, more actionable stuff. That’s the reason why. It’s just a personal opinion in terms of writing style basically. They both essentially the same thing…
OWEN: Just different approaches.
OWEN: Is there a question that you were wishing I asked you during this interview that I didn’t ask you, and if so post that question and the answer.
JOCK: That’s a hard one.
OWEN: Or maybe what else do you think should be added to this conversation that will make it even more valuable?
JOCK: Yeah, in the framework of systemizing the business.
JOCK: I personally think if you work on yourself a lot more in terms of educating yourself in the process, educating yourself in terms of what needs to be done you’re going to have a lot better results in terms of systemizing a business. I’ll probably go back through the archives of SweetProcess, you’re probably going to get a whole bunch of ideas from other people that have done the same thing. Another thing is don’t reinvent the wheel, do what’s already working. I guess that’s not really a question that you probably ask, it’s probably my version of a way of thinking about it, the process more than anything else.]
OWEN: What would you say is the best way for the listeners to connect with you and thank you for doing the interview?
JOCK: Sure, two places, the business website is digitalexits.com. They can fill out the form there, or my personal blog is JockPurtle.com and then they can reach me through there. One’s purely about buying and selling businesses and the other one’s more about my thought processes in business and all that good stuff.
OWEN: That’s good. I’m speaking to you the listener. If you’ve enjoyed this interview so far I want you to do us a favor and leave us a positive review on iTunes. To do that go to sweetprocess.com/iTunes, on there you can also subscribe to the podcast so that way anytime we have additional new episode you’ll be notified. If you’re using Android you can leave a positive review by going to sweetprocess.com/Stitcher. If you know another entrepreneur who will find this interview useful please share with them. And one more thing, if you’re at that point in your business where you’re tired of being the bottleneck and you want to get your employees to know step-by-step how you get tasks done, well, then sign-up for a free 14-day trial of SweetProcess. Jock, thanks for doing the interview.
JOCK: No worries.
OWEN: And we’re done.